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Wal-Mart Says Its Logistics Program Is on Track to Be Completed by 2007
posted by admin on 23/06/06
The program will allow Wall-Mart to store and distribute fast moving merchandise such as paper towels, most food items and light bulbs through a portion of its 120 warehouses.
BENTONVILLE, Ark. -- Wal-Mart Stores Inc.'s implementation of its Remix program for speeding merchandise through its distribution system remains "on schedule" for completion in 2007, providing the retailer hopes for a boost to its sales and returns on investment.
The program, which Wal-Mart began implementing last year, will shift Wal-Mart's distribution system to one that uses a portion of the retailer's 120 warehouses to store and distribute merchandise that sells out at Wal-Mart's stores rapidly, such as paper towels, most food items and light bulbs. In turn, Wal-Mart will designate the balance of its warehouses to store and distribute slower-selling fare such as toys, sporting goods and food items such as olives and pickles. The aim is to create a faster route to Wal-Mart's shelves for hot sellers, thereby boosting sales and avoiding stock outages.
Ultimately, Wal-Mart envisions the so-called Remix program helping it to boost sales, trim costs and widen its margins.
Wal-Mart so far has converted its warehouses in the southeastern U.S. to the Remix format. The company plans to begin distributing half of its entire portfolio of merchandise through the Remix program by the end of this year, and the other half next year, said Johnnie Dobbs, Wal-Mart's executive vice president of logistics, during a media tour of a Bentonville warehouse on Tuesday.
"We are tracking exactly on schedule," Mr. Dobbs said. "We've moved the slower moving-items from the grocery distribution centers to the general-merchandise facilities. One of the keys to that was the Replenishment team [paring] the inventories."
Wal-Mart now has crews in its warehouses installing new rack systems to accommodate the new routing of merchandise within the warehouses under Remix.
Another of Wal-Mart's logistics programs -- the introduction of radio-frequency identification, or RFID, for tracking inventory -- also is proceeding as planned, Mr. Dobbs said. Last year, 100 of Wal-Mart's suppliers began adding RFID tags to the merchandise they sell Wal-Mart. The retailer intends to add another 200 suppliers to the program this year, and 300 more next year.
Wal-Mart moved about two billion food cases and 2.7 billion cartons of other merchandise through its distribution system last year.
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